Public App Review: Trading Made Social

Users can make investing a communal affair with the Public app. Public is a fusion of trading and social media, complete with a content feed and influencers. Like many brokers, Public offers no commission trades. However, the added benefit of having no payment for order flow sets them apart. Could this trendy broker be the right one for you? Find out in our Public app review.

This stock broker is a good fit for: Beginner investors seeking more than just a transactional broker.

Top perks

No payment for order flow

In early 2021, Public announced that it would no longer be engaging in "payment for order flow" (PFOF). With PFOF, brokers route market orders to wholesalers instead of filling them on stock exchanges. The broker receives a kickback from the wholesaler, but the investor's order may not be filled at the best price. By ditching PFOF, Public users can be sure that they are receiving the best price for their trades. In the place of PFOF revenue, Public introduced an optional feature where users can tip the broker.

Fractional shares

Beginners looking to buy the biggest names in the market are likely to experience sticker shock. Public offers an alternative: fractional shares. Fractional investing allows small investors to buy highly priced stocks. Instead of buying a whole share of Amazon.com Inc (AMZN) for over $3,000, an investor can buy $5 worth. This feature greatly lowers the barrier to entry when it comes to a diversified portfolio.

Social features

Public offers investors a uniquely social trading experience. With the in-app feed, users can follow one another's portfolios and trades. Additionally, users can publish and interact with posts from influencers.

Town Halls add yet another layer to Public's community. These virtual events allow users to participate in a live Q&A with top executives all over the world. Public users are given exclusive access to ask questions and view answers via the social feed.

What could be improved

Limited investment options

Currently, Public allows its users to trade stocks (including OTC stocks), ETFs, cryptocurrencies, Treasury bills, and alternative assets such as art and collectibles. Left out of the mix are more traditional investments, including mutual funds, non-government bonds, and CDs. Traders with a higher capacity for risk may seek options contracts, which are also not offered by Public. While Public's limited options may be suitable for some investors, it leaves much to be desired.

Limited account types

Public users can only open a taxable account, which allows for trading -- but without certain tax advantages. Currently, Public offers no retirement, custodial, or margin accounts. While this model may be suitable for Public's investor base, it doesn't accommodate a wide variety of investor situations.

Crypto markups

Crypto traders on Public may not pay a commission fee, but that doesn't mean the trade will be free. Public's clearing partner, Apex Crypto, charges a markup on all cryptocurrency transactions. This markup varies between 1% and 2%, and shows up in the order execution price. This markup is higher than many we've seen among other crypto brokers, but it's important to note that other brokers charge commissions where Public does not.

Like many top online brokers, Public doesn't charge users to place trades. Known as zero-commission trading, this practice was introduced by Robinhood and has become widespread ever since.

However, as a PFOF-free broker, Public has had to find other ways to generate income. One of these is optional tipping, where investors can pay Public a tip for executing an order. Another is a 1%-2% markup on cryptocurrency transactions through Public's clearing house.

When it comes to mutual funds and ETFs, Public has little to offer. Currently, the platform does not support the buying and selling of mutual funds. However, Public offers access to a wide variety of no-commission ETFs.

READ MORE: Best Brokers for Mutual Funds

Although Public prides itself in charging no commission fees, other fees apply. Some common charges include:

• Broker-assisted phone trades: $30
• Domestic wire transfers: $30
• Returned check/ACH/wire transfers: $30
• Outgoing account transfers: $75
• Paper statements: $5
• Paper trade confirmations: $2

The Public investing app has a lot to offer for beginners. Educational content and a straightforward interface make trading easily accessible. As mentioned above, social features including the feed and Town Halls add a collaborative layer to the platform. Plus, the Explore page highlights themed lists of stocks and ETFs. Public also allows users to organize their long-term portfolio. Although experienced traders may find Public's platform lacking, it offers an accessible, community-driven approach to investing.

LEARN MORE: Best Online Stock Brokers for Beginners

Public does not currently offer trading on margin.

While Public offers no research reports to its users, it does offer a wide variety of educational content. Built for beginners, educational articles cover everything from retirement to crypto to recent IPOs. Resources are written in plain English, and offered on Public's website and in the app.

• You want a social element to your trading: Public offers an incredibly unique user experience. Combining a content feed with trade sharing provides users with a community aspect to investing.
• You care about transparency: Public's offering of zero-commission trades is a great deal for investors. Forgoing PFOF is an even better deal. Public holds itself out as an advocate for its investors, and it's putting its money where its mouth is.
• You're a beginner investor: Public is a very friendly place for a beginner. The platform offers educational information and is easy to use. With no commission fees and fractional shares, Public lowers the bar of entry for investing.

Compare Public to other brokerages

Wondering how Public stacks up to the competition? Check out our reviews:

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology